Business Acumen: A firm or an organisation’s success and holistic growth is always a collaborative effort of the employer and the employees. It is rather unversed to conceptualise that leaders must be savvy with all the necessary skills pertaining to the arena of business while the employees should blindly follow them. Since the business model’s functioning includes both departments, it is crucial that both of them are equally proficient.
There is an aspect of Business Acumen. The world of business recognizes this concept widely. It is necessary that every set of directors or owners educate the employees regarding this. However, not many are aware.
In the ensuing article, we shall discuss the definition and significance of Business Acumen. Further, check its development in the workplace as a fundamental concept. Read subsequently in order to know What is Business Acumen and how to develop it with Your Employee.
What is Business Acumen?
Business Acumen is the fundamental concept of where the entity equips itself with the savviness to deal with business decisions. In a workplace, there are multiple issues that arise in the context of business complexities. Certain skill sets apply to resolve these general issues faced. The decisions that often lead to beneficial or progressive results are termed within the skill of Business Acumen.
Hence, if we consider a very specific definition, Business Acumen is the proficiency in comprehending business models and relative tasks within a particular set of conditions which reasons decisions that result in financial improvement and developed leadership.
This seems to be a fundamental concept that needs to be applied at the foundation. Nevertheless, there is a common misconception that this is only applicable to the decision-makers in the organisation. Business Acumen is believed to be a skill set for people in an organisation that handles choices pertaining to the bigger picture. However, on an employee level, it is important that the company preaches this concept as well. It has its importance in all levels and domains of an enterprise.
What is the need for Business Acumen?
It is of extreme importance in the business sector that there is a provision for education regarding business acumen. The reason is that this covers all the necessary skills required to run and work in an organisation.
Be it analysation of business goals, a fundamental understanding of the market, consideration of the synchronisation of the levels of workplace movements, comprehension of the graph of finances, or any other, everything is included under this term. Anyone heading a team must be well-equipped with this fundamental skill. They may regularly face situations where their decisions can be path-changing for the business model.
For the employees, there has been a relative growth in the urge to develop this quality over time. The prime objective is that the employees are not limited to only following orders of the decision-makers. They might face certain situations where they will have to take charge. Furthermore, to understand the behest that they have to consider, they must also hold substantial knowledge.
Employees must understand that the paths that the leaders choose are striving towards fulfilling company goals. Thus, they must also equip themselves with this understanding.
Disciplines of Understanding Business
Understanding Business is nothing but sheer business acumen. This concept has four disciplines. The importance of these disciplines is that while applying and implementing this fundamental in the form of a concept to the business model, there has to be a certain chronology. These four skills have to be present if an understanding and perfect decision-making in terms of business has to work and operate. You need to understand how the aspects work and what importance they hold:
- Planning: The first and foremost skill that is crucial in terms of business decision-making and understanding is planning. Relevant planning attributes lead to a very organised functioning of the organisation. Thus, it is necessary that the employees plan well before implementing any of it. A well-planned and structured model of business mostly succeeds.
- Operations: Understanding regular activities is extremely necessary. The employees must be aware of the impact of the general activities and their importance. The intensity of their comprehension of the operations that regulate within an organisation can lead to better choices.
- Finance: Financial aspects are basically what the business goals primarily focus on. It is crucial that the employees understand the financing and accounting of the organisation and finally make decisions accordingly. This education or skill needs to be present in every employee since it will incredibly affect the decision-making capabilities and eventually be a game changer.
- Strategy: The final skill has to be the one that involves strategising. The employees must be skilled in strategising as per the situation as it involves consideration of the results and all the situational components at hand. Accordingly, they can make decisions and this shall further the cause of the holistic development of the organisation.
Important Parts of Business that Employees Need to Know
Just as necessary as the aforementioned skills are, there are certain things that the employees need to essentially know. These can highly influence their application of the disciplines in order to reach a choice. Thus, the ensuing components of the company must be conveyed to the employees so that they can make a rational decision that eventually contributes in the betterment of the organisation:
- Goals of the Company
- Earning Sector of the Business
- Role of Every Sector in the Business
- Their Role in the Company
10 Ways to Develop Business Acumen
In order to develop business acumen in self or in the employees, there are certain steps that need to be followed. It is necessary that the business trains their employees as per their strategies and also improvise on self-growth in terms of leadership skills. Check the ensuing simple ways by which you can develop business acumen with your employees:
- Research various aspects and strategies that are involved in the quest of the company to achieve its business goals so as to develop analytical skills.
- View Financial statements and carefully consider the accountancy parts of the business organisation. You must be equipped with necessary terms pertaining to finances even if they do not bother your sector of work necessarily.
- Understand the operations and their main sources of earnings that have to be recognized as top priorities.
- Read books relative to business and your field in order to develop a greater understanding of the text and plans pertinent to them.
- Always be updated with current affairs and the relative news regarding the field you are working in and your company deals with. You must be aware of what the present standards are, the performance of competitors, and where you stand.
- Carefully listen to the board of directors and try to relate what they intend and how it matters to you and your roles.
- Educate yourself about other departments of the business as well. While it is important that you know everything about the sector you are working in, it is also important that you are aware of other sectors and their performances.
- Carefully understand the reviews and feedback of the customer as that is the real review of your performance.
- Find a direction and line within which you must work.
- Finally, prioritise the application of business acumen.